WSA sees steel demand up, Asia to profit most
European steel demand will bounce some 20 percent in 2010 as the global industry recovers, but much of the West's business has been irrevocably lost to the East, the World Steel Association said on Monday.
Director General Ian Christmas said the outlook for the world steel industry was brightening and the association would likely nudge its global demand growth forecast to around 10 percent from nine percent, due to the improving global economy.
"The industry is in a positive mood," he told Reuters in an interview. "But still cautious about the recovery."
China will continue to grow around 10 percent and you'll find double digit increases in demand in the old industrialized countries," he said, adding that this followed hefty losses in Western demand last year.
He said demand could grow 27 percent in Germany and 30 percent in France in 2010 as Europe's major economies recover.
But he added the crisis had done permanent damage to the Western steel industry as business thrived in fast-growing Eastern economies like China and India.
"Europe has permanently lost some businesses to other parts of the world and it will never come back," he said.
"The emerging economies are putting on steam and therefore we've seen a permanent shift in the dynamics of our industry."
Christmas said BRIC countries -- Brazil, Russia, India and China -- will account for some 60 percent of the global steel demand this year, compared to 58 percent in 2009 and 50 percent in 2008.
Global steel demand in 2010 would return to 2008 levels, but that demand in "old industrialized countries" this year would only be half way back to 2007 levels.
Christmas added that restarts of blast furnaces across Europe signaled a return of confidence in the industry, but that there were also concerns about too much production being restarted prematurely.
DOMESTIC DRIVE
Further growth in China and India would be domestically driven, he said.
"Rising income levels in these countries will drive domestic consumption, therefore the engine of growth is no longer in the old world, it is now permanently switching to the new world."
And the autos sector was going to be key to the industry's recovery, he said.
"Automotives clearly are going to be a positive dynamic in China and India," he said, adding that there was more uncertainty about where disposable income would go in the West.
Christmas said improving Western auto sales in 2009 may have been the result of government-backed scrappage schemes encouraging people to bring forward sales that would otherwise have occurred in 2010. But he attributed rising car sales in China and India to real demand.
In January China's passenger car sales jumped 115.5 percent on the year and Indian monthly car sales hit a record high.
"That's driven not by cash for clunkers but by rising incomes in the population," he said of China's auto demand.
(Source : Reuters) |
